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Like any sailor worth his salt, Steven Sohlstrom has worked hard to prepare for his next journey in life: retirement.

Though it's still a few years away, Sohlstrom, 53, has the same question as many others in the same boat: "At what point do I know that I have enough?" he said. "Enough to comfortably retire and maintain the style of living I'm accustomed to."

That lifestyle — a roomy home on 5 acres on the Eastside, a nice boat, private school for his daughter — has been the product of more than 25 years as a sales manager with Dex Media, where he makes from $100,000 to $115,000 a year depending on his bonus. With his primary residence and two rental homes, he estimates he has about $1.2 million in real-estate equity.

On top of that, Sohlstrom launched a sport-fishing charter business several years ago on the Washington coast, building it from one boat to a fleet of eight 45-footers with 17 employees.

"I put my way through college working on boats," said Sohlstrom. "I really have a passion for boating and being on the water."

It's a passion he hopes to pursue as a full-time business after retirement from his sales job, perhaps heading for the warmer waters and a longer fishing season of Hawaii's Kona Coast.

Life hasn't always been smooth sailing for Sohlstrom and his 12-year-old daughter, Rachel. Four years ago, his wife passed away after a brief illness. Sohlstrom says he and Rachel were left devastated and heartbroken.

"She had become a stay-at-home mom and I was totally dedicated to providing everything possible for our family," he said.

These days, Sohlstrom says, he and his daughter are striving forward on the road to recovery. "Together, we make a great father-daughter team," he said.

Focusing on the future

Two years ago, he sold the sport-fishing business for a $550,000 profit because, as a single parent, he could no longer dedicate the extra hours to keep it afloat.

Since her mother's death, Rachel has received a Social Security benefit of $1,600 a month, which Sohlstrom uses for her upbringing and to pay a nanny who works part time during the school year and full time in the summer and when he has to be on the road for work.

Though he originally intended to sell one of the rental properties to finance Rachel's college tuition and keep the other as a starter home for her, Sohlstrom recently learned Rachel will inherit a trust when she is 18 from her maternal grandmother, who also covers Rachel's private-school tuition.

With Rachel's future squared away, Sohlstrom is focusing on his own.

He has an investment portfolio worth about $300,000, another $200,000 in his 401(k) and both his own pension and survivor rights to half of his wife's pension from her 22-year career.

He has three mortgages and the balance of a boat loan, for a total debt of about $470,000, to consider.

"I can still keep working and generate enough income to pay all those bills for a few more years before I have to cut the umbilical cord and live off the nest egg," he said.

To find out if his plans are feasible, Sohlstrom met with Michael W. Boone, a certified financial planner with his own firm in Bellevue, MWBoone and Associates.

Boone, a member of the Financial Planning Association — Puget Sound Chapter, said that despite some challenging circumstances, through hard work and discipline, Sohlstrom has placed himself in a position that few Americans enjoy, but many desire.

"They biggest thing they did right, that allowed him to survive that difficult time, was that they weren't overleveraged," Boone said.

Unlike many two-income families, Boone said the Sohlstroms weren't in a position where everything had to go perfectly to continue their lifestyle.

"The reality is, stuff happens more than people think it does," Boone said.

Through good planning, he said, you can avoid getting crushed and go on to survive and even thrive when tragedy strikes or a job is lost.

"As rosy as things likely will go for (Sohlstrom), he has some noteworthy risks to consider and plan around over the next few years," Boone said.

For one, Boone assessed Sohlstrom's overall risk tolerance to be moderate, but his portfolio was invested 100 percent in stocks — an aggressive position.

"He recommended that I change to approximately 30 percent bonds," Sohlstrom said, adding that he plans to reallocate soon.

Boone also uncovered some opportunities for savings for Sohlstrom. For one, Boone found that Sohlstrom has more life-insurance coverage than he needs. Sohlstrom has since adjusted his coverage downward and will likely be paying $70 less per month when the changes kick in next month.

And for the rental properties, Boone advised Sohlstrom to take advantage of today's lower interest rates and refinance both mortgages.

Sohlstrom said he's working with a mortgage broker to adjust a 6.75 percent, 30-year loan and a 6.45 percent, 20-year loan to two 4.75 percent, 15-year loans. The shortened loan term will help him build equity faster.

"The monthly payment will be about the same," he said. "But that shortens the life of the loans down substantially."

Increasing liquidity

Among other action Sohlstrom has taken since meeting with Boone is to increase his IRA contribution from 12 to 14 percent of his salary, which Boone said would reduce his taxable income, and to start thinking about building a three-month emergency fund in cash.

Though Sohlstrom has significant assets, most are in real estate or investments that aren't as liquid as cash should an emergency arise. Sohlstrom says Boone wants him to set aside an additional $30,000 or $40,000.

"I'm not sure how quickly I can work on improving in that department," Sohlstrom said. "With the holidays here, that's sort of on the horizon."

Boone and his team ran a Monte Carlo simulation (a mathematical model used in financial planning) on Sohlstrom's retirement goals and said it shows almost a 95 percent chance of success, assuming Sohlstrom retires in 5 ½ years when Rachel graduates from high school and runs a sports-fishing business in Hawaii — which Sohlstrom figures will earn about $100,000 annually — for 10 years after that.

Boone built into the plan a new, replacement vehicle every seven years, maintenance costs on his properties and keeping the nanny until Rachel is 16.

In this scenario, Sohlstrom would begin taking Social Security payments at 62, receive his survivor benefit of half of his wife's pension, and take a lump sum of his own pension to reinvest within his IRA.

Boone and his team also noted that they advise clients that it's not outside of the realm of possibility for pension benefits to be reduced, depending on the financial health of the sponsoring company.

In general, it may be prudent to check with an employer to see if taking an in-service withdrawal or early distribution of a pension or 401(k) is allowed under the company's plan.

Boone's team said the policy varies by company and cautioned that penalties may apply, so individuals should work with a tax or financial expert before taking an in-service withdrawal.

With estate laws changing over the next couple of years, Boone told Sohlstrom to consider gifting to loved ones, charitable giving or a 529 college plan in the future to reduce the size of his estate.

The exclusion amount drops to $1 million for federal estate taxes in 2011, Boone said, which would make Sohlstrom's estate taxable.

"Steve's heirs (Rachel) could pay a maximum rate of 55 percent of every dollar to the IRS," Boone wrote.

Sohlstrom says he's still working with Boone on a few aspects of his plan, but has been very comforted by the analysis so far.

"All you do all your life is work your rear end off and you always wonder if it's enough," Sohlstrom said. "But hearing Boone say that I'm really set made me feel great."

Sohlstrom also appreciates the sense of direction he's been given by the financial-planning process.

"It was the best thing that could ever have happened to me at this time in my life," he said.